Vatican Bank Flunks Again

Moneyval, the European Bank regulator, sharply criticized the Vatican Bank in its annual evaluation (here). While the Vatican Bank has improved its detection of crimes like “fraud, serious tax evasion, misappropriation and corruption,” it fails to punish the guilty, and has done little to prevent such crimes.

The Vatican Bank has by far the worst record of any European or American bank. Any commercial bank with their record would have been shut down decades ago. Pope Francis came into office promising to fix its problems. New management has come and gone, but the problems remain. Concerning its failure to prosecute crimes, Moneyval said : “While this review cannot form a view on the quality of the evidence adduced in financial crime cases that have so far come before the [Vatican City] tribunal, the success rate … so far is not encouraging.”

In response to the Moneyval report, the Vatican declared it is “committed to taking the necessary actions in the relevant areas to further strengthen its efforts to combat and prevent financial crimes.” In other words, the check is in the mail - just as it has been for decades.

The Vatican Bank is not only thoroughly corrupt, it grossly inefficient. Its direct and indirect overhead costs far exceed those of large commercial banks. The Vatican could not only clean up its financial affairs by using commercial banks and shutting down the Vatican Bank, it could save a lot of money as well. Banking is not a central Church function. In fact, for much of its history the Vatican condemned banking as a grave sin. Only Jews were bankers. But the Church eventually recognized that banking was highly profitable, and altered its theology accordingly.

The corruption of the Vatican Bank is not a mistake or error- it is the reason it exists. Popes have always used it as their private piggy bank, taking bank funds to support their pet projects. Church leaders benefit from its crimes. That is why the Vatican does not allow Moneyval to examine the Bank’s books in detail.

A Recurring Theme

Pope Francis had two priorities when he took office. His top priority was to fix the child abuse scandal. He declared a policy of zero tolerance, and appointed a special committee to deal with the problem. It was a farce. The only two members of the committee who were victims of priestly sex abuse quit in protest. The commission has done nothing of substance, and is an embarrassment.

Pope Francis’ second priority was to reform the Vatican’s finances, including the Vatican Bank. He created new organizations, brought in new leaders, and made many promises. Most of these leaders are gone. There is no visible progress, nor is any foreseeable.

Although Pope Francis has failed miserably in his top two priorities, you’d never know it, and he is widely considered a great reformer. In Myanmar, he recently faced political leaders responsible for the rape and genocide of the Rohingya - and failed to criticize them. Yet despite all his moral failures, Pope Francis remains extraordinarily popular. It’s good to be king, and even better to be pope.